Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By Greater Fool (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

The predicament

% of readers think this story is Fact. Add your two cents.


Next week, as you know, everything changes. Trump becomes POTUS. The Dow crosses the 20,000 mark for the first time. America becomes Great Again. But we don’t. And just imagine, as I suggested last week, if Donald does to the Canadian car industry what he just did to Mexico. The last of you in Oshawa and Windsor can turn off the lights.

Big changes are already afoot. Calgary, for example, has a full-blown commercial real estate crisis on its hands. Eight floors in the snazzy giant Bay Street bank tower where I sometimes hang out just emptied, which makes the elevator trip into the sky a lot faster. And, wow, look at Vancouver.

Chris Doherty was a career veterinarian (we love vets on this blog) but these days does economic and business research for other animal-treatment practices.

“Perhaps I have too much time on my hands, or need a new hobby,” he tells me, “but back in late July, I randomly selected a smattering of homes from the GTA, Guelph and Vancouver to keep an eye on. I would check back on them every now and then to see if they were still listed, and if so, what their price was.”

He sent me an elaborate, impressive, colourful spread sheet of the results. “Most of the GTA results are unsurprising,” he reports, “but Vancouver was quite different. For one, it took far longer for the listings in Vancouver to dry up. Additionally, some listings in particular are very interesting:

“3312 CHURCH STREET – Originally listed for $1.868m, dropped to $1.79m, and is now listed as “Sold”, with a list price now recently at $849,000.”

“14 8531 BENNETT ROAD – Originally listed for $668k, increased to $769k, then down to $758k and now down to $599k, with ad mentioning a motivated seller.”

Well, there you have it. Three real-life examples of what’s actually happening on the ground in what was, until a few months ago, not only the hottest real estate market in Canada but the steamiest on the planet. It was fed continuously by the volatile fuel of cheap rates, lax lending by outfits like Vancity, pro-housing policies, rampant local speculation and realtor-inspired FOMO using Chinese dudes as the catalyst for panic buying. As average house prices soared way beyond the ability of average families to buy in, it was only a matter of time before the inevitable occurred – as vet Chris chronicles.

“Interesting what you find when you search out data points for yourself,” he says, “rather than relying on the spoon fed conclusions from the Real Estate Boards.”

You bet. And let’s all remember it was the Vancouver board that started using Frankenumbers instead of average monthly prices, knowing full well they’d come in handy one day to mask a rapidly deteriorating market, continuing the fiction that real estate’s safe. Well, it’s not. Especially now.

(Note: One home Chris used as an example of radical price drop was removed from the original post as he erred in his research.)

Here’s some bank-generated evidence of what this pathetic blog told you a while ago. There is only one real estate market still standing. What a stunning reversal from a couple of years ago when homeowners in Winnipeg, Edmonton, Saskatoon, Calgary, Regina, Kelowna and the entire Lower Mainland were crowing about ever-rising house prices. Like most investors who inevitably get squished, they confused a bull market with brains.

Two final points. Almost 80% of potential first-time homebuyers in Ontario are now saying the feds’ new mortgage Moister Street Test is stressing them out, and quashing their ability to purchase. “Our survey indicates that the new stress test will have a negative impact on first-time buyers’ ability to buy a home,” says realtor boss Tim Hudac, who wants the government to give the kids free money so his members will not have to turn in their Audi A7s. “Mortgage stress testing, rising house prices, lack of supply — we’re dealing with a real estate market that is getting tougher and tougher for the first-time buyer to break into, especially in the GTA.”

You bet. Of the moisters surveyed, 45% can’t save enough, a third have to buy a cheaper house and almost a quarter are moving out of town. So, combined with the higher interest rates that the Trumpster will be bringing with him, how long can the Toronto market stay at this altitude?

Lastly, consider the ripple effects when real estate goes bad. Calgary’s a lesson. In the last few days came word the value of downtown office properties has dropped by an eye-popping $4 billion, as the vacancy rate soars above 25%. Look at the city’s shining landmark Bow Tower – whose value has dropped 22%, where dozens of floors are dark and likely to stay that way for years.

“The bigger story is: How far can this go?” Greg Kwong, regional managing director for commercial real estate services firm CBRE Ltd. told the local paper “I can almost guarantee that you’re going to see property values drop further.”

Nobody’s immune from this. And it may get worse if Trump trashes Canada. BTW, did you hear T2 is snubbing his inauguration?

Is there a vet in the house? I’m faint.



Source: http://www.greaterfool.ca/2017/01/08/the-predicament-2/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.